Stock Market Today Results
- Stock Market Today: Rally Over Already?
- Stock Market Today Stalled on Fiscal Cliffhanger
- Stock Market Today: This Stock Wins With or Without QE3
- Stock Market Today: U.S. Credit Rating At Risk Again
- Stock Market Today: This Tech Stock Rallies to All-Time High
- Stock Market Today: Markets Slide as Manufacturing Shrinks
- Stock Market Today: Two Big Winners in Another Quiet Day
- Stock Market Today: Stocks Edge Higher To End the Week
- Stock Market Today: Poor Labor and Manufacturing Data Sends the Markets South
- Stock Market Today: Waiting On Clues From the Fed
- Investors Look to Fed to Stimulate Stock Market Today
- The Slowing Economy Won't Stop the Stock Market Today
- Tech Stocks Carry the Stock Market Today
- Stock Market Today: Sales and Earnings Fears Push the Market Lower
After Washington announced a fiscal cliff deal Tuesday, investors raced into stocks and other risk-on trades, relieved that the country wasn't going to tumble over the dreaded fiscal cliff.
"You've just removed a huge worry from the market," Jonathan Samson, chief investment officer at Samson Capital Advisors told The New York Times.
In response, the Dow finished the first trading day of 2013 up 308. 41 points, or 2.35%. The gains also propelled the benchmark index to its highest close since Sept. 14, 2012. Volume was heavy with more than 4.5 million shares changing hands on the Big Board.
The Standard & Poor's 500 Index added 36.23 points, or 2.54%, and the tech heavy Nasdaq tacked on 92.75 or 3.07%.
Gold gained $13 to close at $1,688.80; silver added 78 cents to $31.01, and oil gushed higher by $1.30 to finish the day at $93.12.
But by 10 a.m. today, the Dow had slipped more than 30 points, or 0.23%.
Some Wall Street analysts were quick to warn that the fiscal cliff euphoria will die out by next week, and that yesterday's rise was nothing more than a short-term relief rally.
"Considering there are so many headwinds facing the economy, including the debt ceiling negotiation in 60 days, the smart money knows the bullish sentiment will be short-lived. The lesson for investors here is 'buyer beware,'" Todd Schoenberger, managing partner at LandColt Capital wrote in an email to FOX Business Network.
Shortly after 1 p.m. on Wall Street, the Dow Jones Industrial Average was down 10 points, the Standard & Poor's 500 Index was down about 3 points and the Nasdaq slipped nearly 14.
Of note in the ongoing fiscal cliff saga was U.S. President Barack Obama and Vice President Joe Biden's 10 a.m. meeting with six state governors on how to avoid the looming double whammy of higher taxes and government spending cuts.
The White House guests included three Republican governors: Gov. Gary Herbert, R-UT; National Governors Association (NGA) Vice Chair Gov. Mary Fallin, R-OH; and Wisconsin's Republican Gov. Scott Brown, who is best known for his battles with public employee unions during the election season.
Representing Democrats were Gov. Jack Markell of Delaware, chairman of the NGA; Arkansas's Gov. Mike Beebe and Gov. Mark Dayton of Minnesota.
Following the meeting, President Obama will engage in his first television interview since the election at 12:30 p.m. with Bloomberg News.
Market participants continue to sit on the sidelines as the GOP and Obama administration butt heads over how to avert falling off the cliff.
- QE3 a 99% certainty?... Not quite- When the Federal Open Market Committee makes its statement at 12:30 p.m. EDT every investor will be waiting to hear if QE3 has finally arrived. After what seems like two years of speculation since QE2 was announced will we finally get QE3? According to Citigroup Inc. (NYSE: C) a gauge of indicators of market expectations for additional central bank stimulus rose to a record 99% in August. Yet many economists do not expect QE3 to be announced today for many reasons. If the Fed takes action it will be viewed as highly political coming just months before Election 2012. Even if the Fed announces QE3 but says it will delay QE3 purchases until after the election as it did with QE2, the political implications will still be there. Other reasons are the lack of progress the previous rounds of QE have had in turning around the economy - and not just the stock market. "The Fed continues to want the economy to grow faster and specifically, to grow more jobs, but the ability of QE to do that is extraordinarily limited," Catherine Mann, a finance professor at Brandeis and former Federal Reserve economist told CNN. "We know that QE reduced interest rates, but we also know that has not led to more construction, more mortgages, more business investment, or more lending. Since it hasn't done any of that, it probably hasn't created jobs either."
- Producer prices rise most in three years- Wholesale prices, measured by the producer price index, climbed 1.7% in August - the most since June 2009 - due to higher gasoline and natural gas prices. This was a faster increase than the 0.3% reported in July and ahead of the median forecast for a gain of 1.3%. Food prices rose 0.9% due to a rise in dairy and egg prices. The core producer price index which excludes food and energy rose 0.2%, which was in line with expectations. Tomorrow's consumer price index will be a good indicator if higher wholesale prices have translated into increased consumer prices.
The major headlines in the stock market today (Tuesday) include Moody's warning it might lower America's AAA rating, the trade deficit and a financial shakeup:
- U.S. Credit Rating at Risk- In a statement released Monday, ratings agency Moody's said the United States is in danger of losing its AAA credit rating if Congress cannot come up with a solid plan to lower the debt-to-GDP ratio. "If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable," Moody's said in an e-mailed statement. "If those negotiations fail to produce such policies, however, Moody's would expect to lower the rating, probably to Aa1."
Currently Moody's rates the U.S. AAA credit rating with a negative outlook. Standard & Poor's last year downgraded the U.S. to AA+ which is the equivalent to Moody's Aa1. Both agencies cite the political bickering in Congress and inability to deal with fiscal situations as the main reasons for the downgrades. S&P has mentioned that those risks could lead to another downgrade. When President Obama updated his federal budget in August the debt-to-GDP ratio was projected to be 75% by 2022, currently it is just over 1.04%. If lawmakers decide to go off the fiscal cliff as a debt reduction measure Moody's said it will maintain its current rating and negative outlook and then wait to see results of the fiscal cliff before deciding to return to a stable outlook.
The major headlines in the stock market today include Europe's latest rescue effort, cautious optimism on U.S. jobs, and these big-name stocks leading the rally:
- ECB unveils unlimited bond buying plan- European Central Bank (ECB) President Mario Draghi announced in Frankfurt today (Thursday) that the ECB will embark on a drastic new bond-buying plan. The new program, called "Outright Monetary Transactions," allows the ECB to buy bonds with maturities between one and three years without announcing any limits in advance, as long as the government in question is under a program approved by the Eurozone. The plan is aimed at stabilizing interest rates in the euro area and will require countries such as Spain and Italy to request aid from the ECB to activate the bond purchases.
"Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area," Draghi said at a press conference. "Governments must stand ready to activate the EFSF/ESM in the bond market when exceptional financial-market circumstances and risks to financial stability exist -- with strict and effective conditionality. The ECB reserves the right to terminate bond purchases if governments don't fulfill their part of the bargain." The ECB held its benchmark rate at its record low level of 0.75%. Draghi announced that the ECB won't claim the status of a senior creditor if the bonds it buys have to be restructured and that the purchases will be "sterilized" meaning there will be no impact on the monetary supply.
- Manufacturing declines for third straight month - The Institute for Supply Management's factory index contracted to 49.6 last month from 49.8 in July, its lowest level since July 2009. Economists are worried that the looming fiscal cliff could deter businesses from spending in the upcoming months. "As I look at this and try to find some rays of sunshine, it's quite difficult," Bradley Holcomb, chairman of the ISM survey, told Bloomberg News on a conference call. "I would characterize this as a sobering picture of U.S. manufacturing right now without any clear signs of immediate improvement."
- Construction spending falls - Construction spending fell 0.9% in July to a seasonally adjusted annual rate of $834 billion, the Commerce Department said Tuesday. Economists had expected a 0.5% gain. Private residential construction fell 1.6%, private non-residential construction fell 0.9% and public construction spending fell 0.4%. Compared with July 2011 spending is up 9.3%.
- Home prices show strong improvement- The S&P/Case-Shiller National Home Price Index increased for the fifth month in a row as prices in June on a non-seasonally adjusted basis were up 2.3% from the previous year and ahead of expectations for a 2.2% increase. Home prices rose 6.9% in the three months ended June 30 compared to the first three months of 2012. The index, which measures single-family homes and covers more than 80% of the housing market in the United States, continues to back up the belief that the housing market has finally turned a corner. "We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change," said David Blitzer, a spokesman for Standard & Poor's, in a statement. "The market may have finally turned around."
- Consumer confidence falls to nine-month low- As worries over the economy escalate and more Americans are unemployed consumer confidence slipped to its lowest level since last November. In August, consumer confidence, measured by the Conference Board's Confidence Index, fell to 60.6 from 65.4. Economists had hoped the index would rise slightly to 66. The board's future expectations sub-index dropped to 70.7 from 78.4, while the present-conditions index was basically unchanged at 45.
- Mario Draghi to skip Jackson Hole- President of the European Central Bank Mario Draghi was expected to be the keynote speaker Saturday September 1 in the second day of the Jackson Hole, WY Symposium. Draghi will not attend due to his heavy workload regarding the strategy of the ECB's new bond-buying plan. Details regarding the European Stability Mechanism and other measures to improve the Eurozone debt crisis are expected to be announced at the ECB's next meeting Sept. 6.
- Capital goods orders declines most in 8 months- Orders for core capital goods which excludes transportation and defense dropped 3.4% in July, the biggest decline since November. Capital goods such as computers, engines, and communication equipment are thought to be key indicator of business spending and this drop certainly does not inspire any confidence in the economy. "There's uncertainty domestically about the tax environment, and there's uncertainty globally about the outcome of the European crisis," Millan Mulraine, a senior U.S. strategist at TD Securities in New York told Bloomberg. "This is not engendering business investment and hiring." Economists had expected this category to rise 0.7% after a previously reported 1.7% decline in June.
- Durable goods orders rise- Manufactured goods which are expected to last at least three years, increased 4.3% in July fueled by airline and auto sales. Economists had expected on average a 2.5% increase. Overall orders last month were lifted by a 14.1 % jump in transportation equipment as demand for civilian aircraft surged 53.9%. This was led by Boeing Co. (NSYE: BA) which had a strong performance at the Farnborough Air Show and received orders for 260 aircraft, up from 24 planes in June. Motor vehicle sales increased 12.8%, the largest increase since last July. Yet omitting the transportation sector, orders fell 0.4% and declined for the second month in a row.
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- Jobless claims rise again- A higher number of people filed for their first week of unemployment benefits last week, a sign that the job market is not improving as hoped. For the week ended August 18 372,000 filed for unemployment, up 4,000 from the previous week, the Department of Labor said Thursday. Economists had expected initial claims to be 368,000. As of the July jobs report, 12.8 million people were counted as unemployed and about 5.59 million people received some kind of state or federal benefit in the week ended Aug. 4. "Jobless claims continue to indicate ... a sluggish labor market," Peter Cardillo, an economist at Rockwell Global Capital in New York told Reuters. "The numbers also strengthen the hand of the Fed to aid the economy with more stimulus."
- Global manufacturing slumps- The flash manufacturing Purchasing Managers Index for the U.S. edged slightly higher to a 51.9 reading in August from 51.4 in July, according to Markit. The August reading marked the first monthly increase in five months, but it was the third weakest result since the manufacturing sector stopped shrinking in October 2009. New export orders continue to be below the 50 mark, indicating contraction, but output and new orders rose. Also causing concerns is the HSBC Flash China manufacturing PMI which fell to 47.8 for August, its lowest level since November and well down from July's final figure of 49.3.
- The FOMC will release minutes from its July meeting at 2 p.m. EDT- Even though further additional stimulus measures were not announced at the last meeting investors will try to decipher what was said for clues that QE3 could be on the way. Many economists think that the Federal Reserve could announce the measure at the Jackson Hole, WY symposium which takes place next Friday and Saturday Aug 31- Sep 1.
Bernanke announced QE2 in Jackson Hole in 2010 but investors may be disappointed this time around. "There's not going to be enough data for him to say anything new," Catherine Mann, a finance professor at Brandeis University and former Fed economist who has attended the meeting twice told CNN. "It's possible he will make some reference to slowing global growth, increasing headwinds from Europe, and the slowing of the economy as the consequence of uncertainty related to fiscal cliff."
Private-sector jobs increased by 163,000 ahead of economists' expectations of 125,000, but down from last month's 172,000. If you remember, last month's number was thought to be a precursor to a great nonfarm payroll report but that number can in at an underwhelming 80,000 jobs.
Investors hope for 100,000 jobs added when July's U.S. jobs report is issued Friday.
Manufacturing continues to slow across the U.S. and overseas, with the latest data slipping from previous months:
- The U.S Markit PMI index fell to 51.4 from 52.5 in June and the ISM reading was again below 50 with a July level of 49.8. This was the first time the ISM index has been below 50 since the end of the recession in mid-2009.
- The United Kingdom's measure of manufacturing, Markit/CIPS Manufacturing PMI index, declined at its fastest rate in more than three years falling from 48.4 in June to 45.4 in July.
- Manufacturing in the Eurozone fell to a three-year low of 44 and two different levels of China's manufacturing hovered around 50. Any reading below 50 signals contraction.
This was slightly ahead of the 1.3% growth economists had expected, but much lower than the revised 2% growth of 2012's first quarter.
GDP was hurt by lower consumer spending, which rose 1.5% in Q2 compared to 2.4% in the first three months of the year. Jobs were another blemish in the report as the Commerce Department reported payroll gains averaged 75,000 in the second quarter, down from 226,000 in the previous three months for the lowest gains in almost two years.
The unemployment rate, which held at 8.2% in June, will be reported next Friday. The unemployment level has exceeded 8% for 41 straight months.
Consumer sentiment measured by the Thomson Reuters/ University of Michigan reading fell to its lowest level of the year. The final reading for July fell to 72.3 from 73.2 in June. The barometer for current conditions inched up to 82.7 from 81.5, while the measure of consumer expectations slipped to 65.6 from 67.8.
Facebook Inc. (Nasdaq: FB) reported its earnings yesterday after markets closed and it was not what investors were looking for.
The company announced earnings per share of 12 cents, which matched expectations. But investors were hoping for profits to crush estimates that had been drastically lowered ahead of the report.
What is more concerning is the absence of any specific plan on how Facebook will monetize mobile users, and the continued slowing growth of its user base.
Facebook stock was down more than 15% today, reaching an all-time low of $22.28.
Investors are trying to brush off jobless claims that increased from last week and existing home sales that fell to an eight-month low.
After financials held the earnings spotlight for a week tech stocks are starting to take over. For the most part they are keeping up the positive trend set by banks.
Intel Corp. ( Nasdaq: INTC) reported second-quarter results after Tuesday's close that beat market expectations and offered strong full-year guidance. Intel stock rose more than 3% in trading yesterday but is down slightly today.
International Business Machines Corp. (NYSE: IBM) reported after yesterday's closing bell and blew past the average earnings per share estimate of $3.42 when it announced EPS of $3.51.
Yet, revenue for the second quarter fell 3% from last year to $25.8 billion, missing analysts' forecasts of $26.3 billion.
The company cited the debt crisis in Europe as one of the main factors bringing sales down but issued a positive outlook for the remainder of the year. IBM raised its 2012 profit outlook by 10 cents, to $15.10, ahead of Wall Street's median forecast of $15.06.
Weak retail sales and earnings worries are leading the markets lower. In June retail sales decreased unexpectedly 0.5% compared to the 0.2% increase analysts had forecast.
The poor sales numbers are part of an ongoing sluggish trend. Recent manufacturing and labor reports provide further evidence that the U.S. economy is slowing.